The resale volume surged by 68.6 per cent year-on-year, compared to 719 units resold in February last year. However, the figure was below the peak of 2,050 resale units transacted in April 2010.

According to the SRX flash estimates, the overall median Transaction-Over-X-Value (TOX) — an indicative measure of how much a buyer is underpaying or overpaying for a unit — went up to S$20,000 last month, compared with negative S$16,500 in January.

For districts with more than 10 resale transactions, the highest median TOX of S$57,000 was posted in District 10 (Tanglin, Holland and Bukit Timah areas).

ZACD Group executive director Nicholas Mak said last month’s resale volume was “relatively impressive”, compared to the same period last year. “(This) is not surprising as the current recovery in the private non-landed residential property market is led by the resale market, rather than the primary market,” he said.

He noted that rising demand in the resale housing market was partly driven by positive sentiments, as well as the lack of major new launches in recent months which led property hunters to turn to the resale market.

The ongoing en bloc fever has also fuelled buying demand, Mr Mak said. “When a development is successfully sold via a collective sale, some owners, especially owner-occupiers, of the existing development would likely buy their next home on the resale market,” he said.

Going ahead, demand is expeced to stay healthy as the lag effect of the collective sale frenzy plays out, he added. “The owners of properties that are sold collectively would only receive the sale proceeds a few months after the announcement that the enbloc sale has found a buyer,” he said. “In the meantime, the owners… would be searching to buy their replacement properties.”

Mr Colin Tan, director of research and consultancy at Suntec Real Estate Consultants, agreed that the en bloc fever is the main reason driving resale prices up. As long as the trend continues, prices are likely to continue heading north.

“En bloc negotiations will prompt more people to look for property in the private residential (resale) market… Owners will then start to raise prices if they receive more viewings,” said Mr Tan, who was surprised by the strength of the collective sale frenzy which is still going strong after more than a year. “The rise in prices we see now is not due to a growth in demand, but rather shrinking supply. It’s an increase due to ‘panic’.”

Last month, the government raised development charges for non-landed residential projects for March to September by an average of 22.8 per cent – the highest in over a decade. Some analysts expect the hike to cool the en bloc fever, with developers facing a double whammy, having been affected by the Budget announcement of an increase in the top marginal Buyer’s Stamp Duty rate.

However, the collective sales market has continued to thrive, with three freehold residential sites sold last week. The biggest deal among them saw Goodluck Garden along Toh Tuck Road sold to the Qingjian group for S$610 million.

Mr Chris Koh, director of property firm Chris International, expects resale prices to continue inching up by about 1 per cent per quarter, for the rest of the year. In particular, residents who have received some “extra cash” from collective sales may be looking to upgrade, pushing up prices of private properties in the core central region and city fringes, he added.

Apart from the en bloc frenzy, Mr Koh noted that prices have also escalated as buyers enter the market due to “herd instinct”. “Such behaviour is quite typical of Singaporeans. A portion of them may be buying out of sentiment, rather than need,” he said.

Prospective buyers who have been waiting on the sidelines over the last 3.5 years or so may also contribute to the surge. “They are coming into the property market now that it is recovering and sentiments are more positive than before,” he said. ADDITIONAL REPORTING BY KELLY NG

Source:
courtesy of TODAY

by Today

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